On July 1, 2019, many of the statewide forms were revised. The good news is … life as you know it (and the way you use the forms) did not change as a result. The even better news is that the statewide forms are improved, enabling you to deliver even better results for your clients. The information below will explain the form revisions, almost all of which occurred within the boilerplate. You can also reference the NWMLS Forms Revision Bulletin 2019.

If you have questions related to any of the forms revisions and you are a REALTOR® member, submit your questions to the Washington REALTORS® Legal Hotline lawyer: legalhotline@warealtor.org.

2019 Forms Changes

Language was added to clarify that the “Listing Input Sheets” are part of the listing agreement. The Listing Input Sheets are the pages that broker and seller complete identifying details related to the property such as price, square footage, number of bedrooms/bathrooms, utilities, etc. Completion of the Listing Input Sheets, with seller’s assistance, is critical to accurate advertisement of the property. Moreover, collecting seller’s initials on the Listing Input Sheets may be fundamental to any defense required of listing broker, combatting allegations of a post-closing buyer, that listing broker misrepresented the condition of the property. Broker should have seller’s initials on the Listing Input Sheets to prove that seller confirmed the accuracy of the information on the Input Sheets. For those brokers who simply input information into the MLS system without using the Listing Input Sheets, you are creating a fact pattern that will make it very difficult to prove that you relied on seller’s representations regarding the condition of the property. If you cannot prove that, you may have no defense if inaccurate information is given to a buyer.

The listing agreements were also revised, consistent with Washington law, to clarify that while a broker is not liable for damage to seller’s property in most instances, broker will be liable if broker’s gross negligence or willful misconduct causes the damage.

The Purchase Agreements were revised to include language in paragraph (a) requiring the parties to use extreme caution when wiring funds to ensure, via a phone call to a known phone number, that wire instructions are accurate. The Condition of Title provision now includes language prohibiting seller from conveying or reserving oil or mineral rights after mutual acceptance. Seller’s obligation to maintain the property includes specific reference to seller’s obligation to maintain “the grounds” as well until such time as buyer is “provided” possession. The attorney’s fee provision is enhanced to make clear that the prevailing party in an action, including an interpleader action, is entitled to recovery of fees and costs. The “Offer” and “Counteroffer” paragraphs include reference to the fact that acceptance of any offer or counteroffer requires delivery as described by the delivery provision detailed earlier in the form (namely, delivery to both the broker and the firm on the other side of the transaction). The “Property Condition Disclaimer” includes language causing buyer to acknowledge that local ordinances may impact a property owner’s ability to use a property as a short term rental.

The most significant revision to the Purchase Agreements is captured in the second paragraph of the “Closing and Possession” provision and restates a newly created state law (RCW 43.44.110). All residential property sellers must provide buyer with a smoke detector if the property does not already include a smoke detector.

The “Loan Cost Provisions” paragraph was modified to create a check box option allowing buyer and seller to agree that a VA buyer will pay buyer’s share of escrow fees. If the box is not checked, seller will pay buyer’s share of escrow fees. The paragraph describing the lender letter that a sale-failed buyer must produce prior to recovery of earnest money makes clear that lender must verify buyer’s possession of sufficient funds to have paid buyer’s down payment and closing costs. The low appraisal provision clarifies that a VA, FHA or USDA buyer cannot be obligated to close once the appraisal comes in low, even if seller agrees to reduce the purchase price to the appraised value. That buyer may agree to proceed at the reduced price, however, and must give notice of buyer’s election to do so within three days of receiving seller’s notice that seller will reduce the price. Form 22AN was modified to include this notice provision. Finally, boiler plate language now obligates buyer and seller to sign a VA, FHA or USDA Amendatory Clause, prior to closing, as required by buyer’s lender.

The revision makes clear that buyer may waive the financing contingency and close the transaction even if the appraised value plus buyer’s agreed “additional down” do not equal or exceed the purchase price and that if buyer waives, seller has no ability to terminate the transaction. Additionally, Form 22ADN is a new form, providing the notices that may be required pursuant to Form 22AD.

A provision was added to the form requiring a residential seller to obtain any waiver required by the Department of Financial Institutions prior to seller utilizing seller-financing and allowing buyer the option to terminate the PSA if seller fails to obtain the waiver. Other modifications make the form more user-friendly but change no substantive terms.

The last sentence of the buyer certification provision was modified to make clear that if a 10% tax is owing, the escrow agent must withhold that amount from seller’s proceeds and pay it to the Internal Revenue Service.

If a buyer requires financing to complete the purchase of seller’s home but chooses not to include a financing contingency in buyer’s offer, buyer should include a Form 22EF, Evidence of Funds form. Buyer would use the form to indicate that buyer is relying on contingent funds, specifically a loan. The form has been revised to include language allowing buyer, in that circumstance, to appraise seller’s home and conduct inspections, if any, required by buyer’s lender.

The identification of utilities form is required when the parties instruct escrow to collect payment from seller for unpaid, lienable utilities. The form should be completed by seller and uploaded to the MLS as an attached document. It is also a useful tool, when completed, for buyer to use in contacting utility providers. The form has been updated to allow inclusion of the utility provider’s email address and/or website.

The boiler plate notices on the first page of the addendum are updated to provide the buyer more meaningful information as buyer considers ownership of the property and conducts inspections and feasibility studies. On page 2, the language regarding obtaining a survey was enhanced to make consideration of the survey a buyer contingency, the on-site sewage system provision now mirrors the Form 22S requirements and the water quality provision allows the parties to agree that the water quality and purity tests either will or will not be submitted to a private lab for additional testing. Paragraph 3, Additional Provisions, was updated in several ways but substantively, the CRP provision now includes contingency language allowing buyer to terminate the PSA following buyer’s review of the CRP documentation.

The Manufactured Home Addendum can now be used either with Form 21, which will require the manufactured home title to be eliminated, or with Form 25 (Vacant Land PSA) if title will not be eliminated. Buyer and seller will agree to a check box identifying the PSA to which the addendum is attached and correspondingly, whether title to the home will be eliminated. If title must be eliminated but seller is unable to eliminate title, seller shall notify buyer of that failure and the PSA will terminate with EM refunded to buyer.

The Well Addendum has always provided buyer a contingency based on the well inspection. The revised Well Addendum creates an additional contingency based on buyer’s review of Well Agreements and documents related to maintenance of the well. Buyer’s contingency will terminate within a specified number of days following seller’s delivery of the documents or the date on which seller’s delivery of the documents is due, whichever is earlier. Buyer brokers will have to be mindful that this contingency period can run, even if seller never delivers the required documents.

The Inspection Addendum (and the Pre-Inspection Addendum, Form 35P) now prohibit buyer from delivering a copy of buyer’s inspection report to seller unless seller requests. Any seller request should be in writing so that buyer broker can prove, later, that seller made the request. If buyer’s inspection report is provided to seller without seller requesting it, buyer will be in breach and subject to a potential damages claim from seller.

The form is cleaned up and eliminates the statement that earnest money will be returned to buyer since earnest money should not have been deposited if buyer and seller are still negotiating the purchase agreement. Additionally, signature lines for acknowledgment of receipt are removed since there is no requirement for the receiving party to acknowledge receipt. The withdrawal of offer/counteroffer is effective upon delivery if timely and properly delivered.

The Buyer Agreements are expanded to obligate buyer to pay compensation not only if buyer purchases property that broker introduced to buyer but also, if buyer purchases property about which buyer inquired to broker/firm.

An additional statement was added making tenant liable for any damages sustained by landlord if tenant holds-over after the rental agreement terminates. Additionally, an “Other” provision was added to each form.

Technical revisions were made to clean up the form and language was added to make it entirely clear that if buyer waives the pending sale contingency, buyer waives all other contingencies benefitting buyer.

Form 17 includes a statement, following question 5(f), notifying seller of the obligation to provide buyer with a smoke detection device if the home is not already equipped with at least one smoke detection device. Washington law now imposes potential fines on seller if seller sells a home without a smoke detection device. Both Form 17 and Form 17-Commercial include revised boiler plate language putting buyer on notice that the property may be in proximity of not only farming activities but also, “working forests” and a new notice regarding the availability of insurance if the property is improved with an oil tank.

Unlike prior years when the Form 17 was revised, there is no requirement to immediately replace all old Forms 17 with a new Form 17. Instead, so long as the property sells before January 1, 2020, seller satisfies the law by delivering a Form 17 or a Form 17-Commercial with a 2015 or a 2019 revision date. If seller completed a Form 17 or Form 17-Commercial with a 2015 revision date and seller’s property does not sell by January 1, 2020, seller must complete a revised form for provision to buyers after January 1, 2020.